Having fallen 17.6% in six sessions only to bounce 10.7% over the past three days, the volatility in Chinese stocks is back today.
The benchmark Shanghai Composite, having been up 0.62% earlier in the session, plummeted more than 4% in less than three hours of trade.
While it bounced fractionally into the close, the index eventually finished the session down 3.44% at 4,528.86.
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Mirroring the fall in the headline index every sector closed in the red with the largest declines coming from consumer cyclicals, telecommunications and technology stocks.
Once again there is no clear catalyst to explain the sudden plunge although, according to Bloomberg, PBOC-backed Financial News reported yesterday that there “probably won’t be any further reductions in interest rates or reserve requirements this month”.
Whether that contributed to today’s decline is anyone’s guess.
As for what will happen tomorrow, who knows. The one thing we know is that it’s likely to be volatile. In the three sessions so far this week the average percentage trading range has been 6.9%, 3% and 5% respectively.
You can read more from Bloomberg here.
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